Directors’ Confidence in Management’s Execution Ability

McKinsey recently issued the results of a survey of 1,000 Board of Directors members (requires free registration).

One of the results was particularly telling: Directors have less than positive confidence in their management teams' ability to execute strategy.

"The survey also highlighted a lack of confidence in executives. Only 8 percent of the directors feel that management fully understands the key initiatives required by strategies for the future, while 38 percent say that it has, at most, a limited understanding."

What's even worse, 2% of directors believe that management actually has no understanding of key initiatives required by strategies.

The McKinsey report goes on to give some suggestions to directors on how to improve company execution. They should become more involved by first helping management grasp the current strategy more clearly. Then management should develop a plan to achieve the strategy, and the directors should test and probe management's plan to see if it really has the ability to execute in a particular area.

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What I don't know is whether the directors will have more confidence once they test and probe management's plan. Sometimes as you get closer to something, you start to see things you once overlooked. Will the directors find that management has greater ability than conveyed in Board meetings? Or that management puts on a better show in Board meetings than ability to back it up?